Selling home in MN -- normal to have listing fee in addition to commission?

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nordsteve
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Selling home in MN -- normal to have listing fee in addition to commission?

Post by nordsteve »

I'm about to list a property I own for sale. Property is in MN in a MCOL city in the metro area where houses are selling quickly.

I interviewed several agents and selected one who offered a 5.5% commission rate. When the listing contract arrived, in addition to the commission there is a $500 "listing fee" that the agent claims goes to the broker.

Is this sort of fee common these days?
CenTexan
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Re: Selling home in MN -- normal to have listing fee in addition to commission?

Post by CenTexan »

Never seen in TX or TN. But most recent purchase was 2 years ago. That agent wanted $250 fee for his broker to "store digital documents."

You should ask the agent to waive/absorb it!
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MillennialFinance19
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Re: Selling home in MN -- normal to have listing fee in addition to commission?

Post by MillennialFinance19 »

Uh, no. This is an added fee. My brother is a Realtor in Florida and said more and more brokers are starting to add them. Ask them to waive it or state that you'll go with someone else. They'll comply.
For the love of God, stick to your plan!!!
rage_phish
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Re: Selling home in MN -- normal to have listing fee in addition to commission?

Post by rage_phish »

Didn’t just have one in CA

Id assume realtors are desperate for listings these days
Firemenot
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Re: Selling home in MN -- normal to have listing fee in addition to commission?

Post by Firemenot »

Why pay 5.5 percent even? Your house will sell itself in this market if it gets on MLS, isn’t priced ridiculously high, and you offer a 2.7 percent buy-side commission. I sold two homes in Twin Cities area using HomeAvenue with realtor assist package. I think at time it was $2,800 but only pay $500 until sale closes. With realtor assist package you get a sign in yard, on MLS, electronic key lock box, scheduled showings, and realtor handling all forms and negotiations. You don’t get open houses. But we had friends hold one or two on our behalf.

https://www.homeavenue.com/selling/compare-packages/

EDIT: I’m 100 percent convinced in my prior situations I netted at least 2-3 percent more than I would have with full traditional realtor commission. And neither were a sellers market like today.
bltn
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Re: Selling home in MN -- normal to have listing fee in addition to commission?

Post by bltn »

5.5% seems high in this market. The $500 dollars is out of the question. I believe all realtor fees are negotiable.

I haven t sold a home personally in 20 years, but a neighbor sold his home about 2-3 years ago, before the lowest interest rates, for a 3% commission. I might try to negotiate a 4% rate.

In the area where I live, all homes seem to be selling in less than a month for full asking price. Not too much work for the realtor. A realtor will be happy to get the listing.
Pu239
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Re: Selling home in MN -- normal to have listing fee in addition to commission?

Post by Pu239 »

I'd hesitate to use any agent that adds a previously undisclosed fee into the final contract. Just say no.
Between the idea And the reality...Between the motion And the act...Falls the Shadow - T. S. Eliot
dfeucht
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Re: Selling home in MN -- normal to have listing fee in addition to commission?

Post by dfeucht »

Sold in MN in 2019 with independent realtor. As long as I used them to buy my next home, they took no commission on selling my home - only paid 2.7% to buyer's agent. Do NOT pay the $500 fee - and it may be a pain, but I think you can likely find a better deal than the 5.5% as well.
adamthesmythe
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Re: Selling home in MN -- normal to have listing fee in addition to commission?

Post by adamthesmythe »

In my not-Minnesotan experience, not normal and not necessary.

Bargain for removal of that fee and try for 5%. These days I would expect you can get it unless the house price is low or it is difficult to sell for some reason.
Firemenot
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Re: Selling home in MN -- normal to have listing fee in addition to commission?

Post by Firemenot »

adamthesmythe wrote: Wed Apr 07, 2021 10:35 am In my not-Minnesotan experience, not normal and not necessary.

Bargain for removal of that fee and try for 5%. These days I would expect you can get it unless the house price is low or it is difficult to sell for some reason.
It’s super hard to negotiate a 5% commission in MN. My strong suspicion is that all the large brokerages there, which control the vast portion of the market, prohibit agents from doing it.
ajr22
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Re: Selling home in MN -- normal to have listing fee in addition to commission?

Post by ajr22 »

I am an agent and an attorney who represents 100s of buyers/sellers a year.

DO NOT agree to pay that fee. All the big real estate broker franchisees are doing it now. It is a scam and normally labeled an "admin fee" and almost every buyer/seller I represent is surprised by it at the closing table and upset it was buried in their buyer contract/listing agreement. If the agent will not cover it for you then find a new agent, no questions asked.

In this market a seller dictates their terms. Tell your agent you will pay him/her 1.5% and 2% to the buyer agent (or other ratios you want). Make that clear in the contract.

With the advent of Zillow, buyers agents can no longer hide listings from their clients. If a client wants to see the house they will see the house. Years ago there was a larger incentive to make sure the buy-side got comped well to draw buyers into your house. If the house is desirable at all, your agent might moan but will accept. Selling homes right now is literally zero effort free money.
Firemenot
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Re: Selling home in MN -- normal to have listing fee in addition to commission?

Post by Firemenot »

ajr22 wrote: Wed Apr 07, 2021 1:32 pm I am an agent and an attorney who represents 100s of buyers/sellers a year.

DO NOT agree to pay that fee. All the big real estate broker franchisees are doing it now. It is a scam and normally labeled an "admin fee" and almost every buyer/seller I represent is surprised by it at the closing table and upset it was buried in their buyer contract/listing agreement. If the agent will not cover it for you then find a new agent, no questions asked.

In this market a seller dictates their terms. Tell your agent you will pay him/her 1.5% and 2% to the buyer agent (or other ratios you want). Make that clear in the contract.

With the advent of Zillow, buyers agents can no longer hide listings from their clients. If a client wants to see the house they will see the house. Years ago there was a larger incentive to make sure the buy-side got comped well to draw buyers into your house. If the house is desirable at all, your agent might moan but will accept. Selling homes right now is literally zero effort free money.
I live in an area where modest homes can sell for 2 million or more. I was chatting socially with a retired agent and she tried to convince me that even in this market the agents were deserving of a 6% combined commission on such a home — so 120K. I had to try very hard not to laugh.
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